Maldives launches $39M fund for workers hit by state firm cuts
Financing program to help employees leaving government-owned companies under a major workforce reduction plan start businesses instead of depending on state jobs
MALÉ, Maldives (MNTV) — Maldives has established a 600 million Maldivian rufiyaa ($39 million) fund to help employees leaving state-owned companies start their own businesses as the government moves to substantially reduce the workforce of loss-making and financially strained public enterprises.
The program is designed to provide an alternative source of income for Maldivians affected by the government’s “rightsizing” drive, which seeks to cut staffing at state-owned enterprises by about one-third as part of a broader effort to reduce their financial burden on the national economy.
Rather than leaving departing workers without an economic pathway, the government plans to offer financing for first-time entrepreneurs and small businesses through the Kumevi Fund, administered by SME Digital, a Bank of Maldives-owned financial institution specializing in small-business financing.
The state-run Business Center Corporation will help applicants prepare the business proposals needed to seek financing.
The policy seeks to address two major economic challenges facing the island nation by reducing the cost of its sprawling state-owned corporate sector while creating opportunities for workers who have long depended on government-linked employment.
Finance and Public Enterprises Minister Hassan Zareer told Parliament Tuesday that the government had already secured the 600 million rufiyaa required for the program and wanted workers leaving state companies to have opportunities to generate their own income.
The initiative comes as Maldives pursues a 33% reduction in the workforce of state-owned enterprises, a politically sensitive restructuring that could affect the livelihoods of a significant number of employees and their families.
Zareer said the government does not want restructuring simply to result in workers losing their jobs without alternatives.
Instead, officials hope some departing employees can use their professional experience to establish businesses and eventually support themselves independently of state employment.
The government has also said workers affected by the restructuring should receive protection regardless of their political affiliation, reflecting longstanding concerns over the political importance of public-sector and state-company employment in Maldives.
For the government, the startup fund is intended to soften the social impact of reducing state payrolls while shifting more workers toward private enterprise — making support for entrepreneurship part of its wider attempt to restructure state-owned companies and strengthen public finances.
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